On September 12, 2017, 50 Cent filed suit against GSO Business Management LLC ("GSO") and five of its business managers alleging, among other things, that the defendants, including Jonathan Schwartz, "failed to counsel” 50 Cent on making a timely ...
I represent clients in chapter 7 and chapter 11 bankruptcies, as well as a variety of litigation, corporate, and business matters.
Curtis Jackson, also known as 50 Cent, makes an appearance at bankruptcy court on March 09, 2016 in Hartford, Connecticut. (Photo by Steve Miller/Getty Images)
Curtis “50 Cent” Jackson III is in bankruptcy court again, and this time it’s the rapper who is filing suit to recover money. Last year, he was required to pay approximately $23 million to his creditors over the course of five years through a confirmed chapter 11 plan of reorganization.
It appears that the 2015 chapter 11 bankruptcy filing itself was a wise choice considering two very sizeable judgments entered against the rapper prior to his bankruptcy filing, one being a $7 million jury verdict in favor of Lastonia Leviston whose sex tape the rapper had made public.
On September 12, 2017, 50 Cent filed suit against GSO Business Management LLC ("GSO") and five of its business managers alleging, among other things, that the defendants, including Jonathan Schwartz, "failed to counsel” 50 Cent on making a timely requisite IRC Section 1398(d)(2) election. This precluded 50 from taking advantage of any of his carried-over Net Operating Losses ("NOL") against his pre petition income and caused the rapper to be stuck with his personal tax liability for all of 2013. Schwartz, a former GSO manager, is currently serving a 6 year sentence after being found guilty earlier this year of stealing $7 million from Alanis Morissette and other celebrity clients.
50 Cent alleges that his business advisors committed professional malpractice when they failed to inform him of the tax election, causing him to pay approximately $200,000 in 'unnecessary taxes', after he told them he was filing for bankruptcy. The complaint asserts Jackson would have "undoubtedly " made the proper elections and taken advantage of the NOL, saving approximately $200,000 in taxes, had he been advised by GSO at the time of the bankruptcy filing.
It's too early to say how GSO and the remaining defendants will respond to these allegations, but a lot will depend on what roles and services the business managers fulfilled for 50 Cent.
The claims against the defendants don't just stop there. The rapper also asserts that GSO essentially paid itself $90,000 of the rapper’s money during the course of the bankruptcy without obtaining the required bankruptcy court approval.
These allegations against GSO seem to coincide nicely with the rappers 2015 song lyrics 'Tryna f^&k me over' and have come at a time where other famous celebrities (see Johnny Depp and Alyssa Milano) have brought similar suits against their former business managers alleging misappropriation of their money.
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